Databases are systems used to efficiently store and retrieve vast amounts of information. An example of a database system is an online transaction processing system (OLTP), which is used in day to day operations of a business. OLTP systems deal with short online transactions like insert/update/delete operations on a database. Also, OLTP systems deal with current business data.
Another example of a database system is an online analytical processing system (OLAP), which is a database storing business data to enable efficient analysis of data. OLAP systems are used in preparation of reports to management based on business data and in the management of business performance through activities like planning, budgeting, and forecasting. Unlike OLTP systems, OLAP systems deal with analytical queries which are low in volume compared to transactional queries, but involve complex queries with a large amount of processing of data.
OLAP systems view business data as a collection of facts. Each fact is a data point characterized by a set of dimensions and a set of measurement values. With the multi-dimensional perspective, users can view data by slicing and dicing along different dimensions to get an in-depth understanding of data by identifying useful patterns within the data, which can be used to improve the future performance of the business. An example of an OLAP system is a relational OLAP system (ROLAP), where data is stored in a relational database. Another example of an OLAP system is a multi-dimensional OLAP system (MOLAP), which is a database that stores business data in a custom multi-dimensional format.